Research On The Cooperative Adverting Decision Of Retailers’ Competition

Cooperative advertising plays a significant role in supply chains and is commonly used in the practice as a strategy to improve the distribution channels. In this paper, we regarded a manufacturer and many retailers as research objects and not only to study the impact of advertising sales, but also focused on the analyzing of competitive effect and retailers quantity. On the basis of the competition between retailers, there are two kinds of situations:first, the retailers do not consider the profit of other competitors, in order to maximize their own interests; second, the retailers pursuit the maximum profit of the retailer alliance but the competition within the retailer alliance still exists. Based on it, we constructed the Nash game model, Stackelberg game and cooperation model between retailers and manufacturer.We made comprehensive analysis of feedback equalizations and then made comparative analysis from several angles. We compared the local advertising investment, national advertising investment, the profit of channel members in different game models. We also compared optimal advertising advertisement arrangement under the condition of retailer competition and cooperation. In addition, we studied the effect of retailer quantity and the retailers’ competitive strength on the relevant decision variables in the supply chain system.We found that the retailer and manufacturer are willing to choose Stackelberg game. The manufacturer wanted the retailer to be competitive state but for retailers cooperation was the most sensible choice. There were differences in the effects of competition effects on related decision variables and were subject to retailer quantity. Besides the Nash game situation of competition between retailers, quantity was inversely related to local advertising investment.